The Errors Compounded: Democratic Liberalism

"Once classical liberalism had erroneously assumed the institution of government to be necessary for the maintenance of law and order, the following question arose: Which form of government is best suited for the task at hand? While the classical liberal answer to this question was by no means unanimous, it was still loud and clear. The traditional form of princely or royal government was apparently incompatible with the cherished idea of universal human rights for it was government based on privilege. Accordingly, it was ruled out. How, then, could the idea of the universality of human rights be squared with government? The liberal answer was by opening participation and entry into government on equal terms to everyone via democracy. Anyone — not just a hereditary class of nobles — was permitted to become a government official and exercise every government function.

However, this democratic equality before the law is something entirely different from and incompatible with the idea of one universal law, equally applicable to everyone, everywhere, and at all times. In fact, the former objectionable schism and inequality of the higher law of kings versus the subordinate law of ordinary subjects is fully preserved under democracy in the separation of public versus private law and the supremacy of the former over the latter. Under democracy, everyone is equal insofar as entry into government is open to all on equal terms. In a democracy no personal privileges or privileged persons exist. However, functional privileges and privileged functions exist. As long as they act in an official capacity, public officials are governed and protected by public law and thereby occupy a privileged position vis-à-vis persons acting under the mere authority of private law, most fundamentally in being permitted to support their own activities by taxes imposed on private law subjects. Privilege and legal discrimination will not disappear. To the contrary. Rather than being restricted to princes and nobles, privilege, protectionism, and legal discrimination will be available to all and can be exercised by everyone.

Predictably, then, under democratic conditions the tendency of every monopoly to increase prices and decrease quality is more pronounced. As hereditary monopolist, a king or prince regarded the territory and people under his jurisdiction as his personal property and engaged in the monopolistic exploitation of his "property." Under democracy, monopoly, and monopolistic exploitation do not disappear. Even if everyone is permitted to enter government, this does not eliminate the distinction between the rulers and the ruled. Government and the governed are not one and the same person. Instead of a prince who regards the country as his private property, a temporary and interchangeable caretaker is put in monopolistic charge of the country. The caretaker does not own the country, but as long as he is in office he is permitted to use it to his and his proteges' advantage. He owns its current use — usufruct — but not its capital stock. This does not eliminate exploitation. To the contrary, it makes exploitation less calculating, carried out with little or no regard to the capital stock. Exploitation is shortsighted and capital consumption systematically promoted." The Idea of a Private Law Society by Hans-Hermann Hoppe